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Inabox Group Limited (“Inabox”, ASX: IAB) is currently preparing its half-year report and provides guidance of its expected financial results for the six months ended 31 December 2014. read more

Inabox Group Limited (“Inabox”, ASX: IAB) is currently preparing its half-year report and provides guidance of its expected financial results for the six months ended 31 December 2014. Expected Results The expected net profit before tax for Inabox for the half-year to 31 December 2014 is in the range of $550,000 to $580,000 ($360,000 to $380,000 after tax). As audit for the period has not been completed, these expected earnings are subject to further review. Comparative net profit before tax for the six months ended 31 December 2013 was $708,336 (NPAT: $471,344). Acquisitions The expected half year earnings include a number of non-recurring costs related to the acquisitions of the businesses of Neural Networks Data Services Pty Limited (“Neural Networks”) and Anittel Group Limited (“Anittel”). Neural Networks’ performance for the half-year has exceeded expectations and Inabox’s present expectation is that the full year earn out is now likely to be $220,000 before tax. As a result, the half-year report will include a reduction in profit before tax of approximately $40,000. Costs relating to Anittel incurred in the half prior to completion of the acquisition on 1 January 2015 amounted to approximately $180,000 before tax. Further acquisition costs of approximately $260,000 are expected to be incurred in the second half. In addition to the above non-recurring costs, a number of carrier-originated back-billing adjustments have been received from network suppliers in the last week which may also have a negative impact on earnings for the half-year to 31 December 2014. The possible impact of these has been included in the guidance provided above, pending further investigation. Underlying Earnings The underlying expected pre-tax earnings result (excluding the above non -recurring costs) for the half-year is expected to be in the range of $770,000 to $800,000. Inabox is pleased that this represents an increase in underlying earnings of around 10% over the previous comparative period.

Inabox MD Damian Kay has revealed how he petitioned communications minister Malcolm Turnbull on data retention legislation, warning that the murky costs and complexities of the scheme could be unmanageable for hundreds of smaller retail service providers. Kay is concerned that the smaller telcos making up a vital part of a competitive industry are simply not being represented in Canberra – and that, unless taken off the table and reworked, the legislation is doomed to “failure and turmoil.” Kay told CommsDay that, while wholesaler Inabox has been engaging in the formal consultation process around the retention scheme via the Communications Alliance, he also contacted Turnbull directly near the end of last year. read more

Inabox MD Damian Kay has revealed how he petitioned communications minister Malcolm Turnbull on data retention legislation, warning that the murky costs and complexities of the scheme could be unmanageable for hundreds of smaller retail service providers. Kay is concerned that the smaller telcos making up a vital part of a competitive industry are simply not being represented in Canberra – and that, unless taken off the table and reworked, the legislation is doomed to “failure and turmoil.” Kay told CommsDay that, while wholesaler Inabox has been engaging in the formal consultation process around the retention scheme via the Communications Alliance, he also contacted Turnbull directly near the end of last year.

“I [wrote to] Malcolm Turnbull [on his] personal email, saying ‘do you really understand what you’re trying to implement here, and do you really understand the different players in the market...do you really think you know the industry at that level?’” said Kay. “’What about all the guys that we support, the 300 guys on the Telecommunications Industry Ombudsman list that we supply... how are they going to comply? [Firstly], how can they afford it, because no-one knows whether people are going to be compensated, or how, or by how much?’”

As well as cost, Kay also highlighted that smaller players might well lack the technical resources to implement such a scheme and, in particular, that supplier arrangement complexities could further compound problems around execution. “We buy from multiple different providers.

So let’s say that we provide a wide area network service to a customer through one of our service providers; we don’t actually have a direct relationship with that end-user, and that WAN is made up of AAPT, TPG, Telstra and Optus services,” he said. “Who do I need to provide that data to? The complexity of the supply arrangements in the industry is nuts... if I’m a small RSP and buy from Inabox or someone else, do I have to build into multiple carrier platforms to monitor?”

But, said Kay, the Inabox group never heard back from the minister. “I don’t think that the small end of town – which still represents a couple of billion dollars a year in telco – is being represented,” he added. “[Turnbull] meets with the big guys, obviously – Telstra and Optus and TPG and all of – that quite often, I’m sure... but the industry was deregulated in 1995-97. Like the rest of the world, they wanted a whole lot of other players to provide competition.

But if you’re going to bring in a whole load of smaller players, niche players, players that fill a need to drive better products, more services, more innovation, better pricing... you need to look after that. There’s no point driving that strategy and then not supporting and representing it well... if you don’t represent them and then make some sweeping changes to the industry without considering the competition that you’ve set out to create, it’s a bit counterproductive.”

And while embattled Prime Minister Tony Abbott has been leaning on the Labor Party to rush the bill through Parliament, Kay wants to see it taken back to the drawing board. “I think they need to delay it, I think they need to do more industry consultation, rework the bill – understand who can get the data, how they’re going to do it and what they’re going to do to make it happen in terms of paying for it, and change the [implementation date],” he said. “Until they’ve done that, I think this is just destined to... failure and turmoil.”

HUNDREDS of small internet service providers are at risk of collapse under proposed new metadata laws, as industry warns the scheme is “half baked” and will burden business with red tape. read more

HUNDREDS of small internet service providers are at risk of collapse under proposed new metadata laws, as industry warns the scheme is “half baked” and will burden business with red tape.

As the government ramped up pressure on the opposition yesterday to support its new metadata legislation, telcos have cautioned against proceeding with the laws in their current form. Peak industry group the Communications Alliance wants the government to provide costing details of the new scheme before it is taken to parliament, amid warnings that half of the country’s 600 service providers will not be able to adjust to the new regime. The call comes after Tony Abbott set Labor a mid-March deadline to pass the new laws that will force telcos to store metadata — including information about phone calls, text messages and ­internet use — for at least two years. But Opposition Leader Bill Shorten said Labor would not be pressured into passing the latest tranche of national security laws, saying “rush and haste” would not help protect the community
He also said Labor wanted the laws to balance national security concerns with the need to maintain individual liberties. Listed telecommunications wholesaler Telcoinabox, which sells internet products to about 300 retail service providers, told The Australian that 90 per cent of the small businesses under its network would struggle to comply with the new laws. There are hundreds of so called “white-label” small retail internet providers in Australia that resell services from larger, upstream providers. Chief executive Damian Kay said the government risked reversing 20 years of deregulation that had injected competition into the sector by pushing ahead with the new laws. “Deregulation was about providing competition and bringing more players into the market; this is going to do the absolute opposite. This will put people out of business,” he said. “You will have a whole lot of smaller players who won’t have the financial capability (and) who won’t have the technical capability to be able to do it,” he said. “They will go broke, competition goes down and so prices go up even more in the future because you have got less players.” Mr Kay said there were also legal concerns about how an upstream network provider would be able to legally collect and store an individual’s data without having a contractual relationship with the customer. “It is a mess. It has loopholes, it is half-baked and they are not listening.” Communications Alliance chief executive John Stanton said smaller resellers typically operated in a thin margin environment and had limited access to capital. “If there is a significant additional system requirement placed on them, that may be enough to push them into consolidation or to leave the industry,” he said. Mr Stanton also said there was concern among service providers that the government may announce a financial contribution for industry to adapt to the new laws, without revealing the total cost. Mr Abbott said yesterday that the government would be contributing its “fair share” of the cost for industry.

“But even if the costs are in the order of a couple of hundred million, you’ve got to remember that this is a $40 billion plus sector, so the costs involved are comparatively modest,” he said.

Australian listed ICT provider, Inabox Group Limited (ASX:IAB), today announced the appointment of former Coca-Cola Amatil senior executive, Vincent Pesquet, as Anittel’s CEO.

This appointment is key in Inabox’s strategic move to be positioned as an expanding and customer-centric ICT company. read more

“We chose Vincent because we wanted a highly effective manager who could implement a high-performing sales culture in the Anittel business, and who was specifically not from within the IT industry. Anittel already has a number of excellent subject matter experts.

“We required a strong leader who could provide the Anittel business with new ideas, energy and direction,” said Inabox Group CEO & Managing Director, Damian Kay.

Vincent has more than 20 years’ experience across roles in leadership, sales, strategy development and marketing, predominately in FMCG working for consumer brands including Coca-Cola Amatil and Fosters Group.

Most recently at Coca-Cola Amatil he helped to transform the company from a single category business into a diversified multi-channel business.

In these roles, he has built a strong reputation as a transformational leader, delivering superior results through building high performing teams and a customer centric approach.

“The ICT market has enormous potential. I’m looking forward to working with the team at Anittel and to be a key player in this market now and in the future,” said newly appointed Anittel CEO, Vincent Pesquet.

Mr Kay adds: “Vincent joins a highly competent ‘C-Level’ team focused on transforming what has been traditionally a wholesale B2B business into three complementary channels focussed on using technology to deliver the right business solutions to customers.”

Inabox completed the acquisition of the business of Anittel Group Limited on 1 January with majority shareholder support. The newly acquired business will continue to operate under the Anittel brand.

About Inabox Group Limited
Inabox supplies wholesale telecommunications (fixed, mobile, data) and cloud products and associated services, including billing and technical and customer support, to retail service providers around Australia through wholesale brands, Telcoinabox, iVox and Neural Networks. Inabox also enables mass-market consumer brands to enter the telecommunications market by leveraging its network and systems capabilities. Inabox now owns IT software and services company, Anittel. www.inaboxgroup.com.au

ICT provider Inabox Group Limited (ASX:IAB) has successfully completed the acquisition of IT software and services company Anittel. read more

Inabox paid $500,000 in cash and issued over 6 million in shares to Anittel shareholders in the deal. A further payment of $1.5 million could be due subject to the performance of the Anittel business in the second half of the 2015 financial year.

As part of the transaction, former Anittel chairman and CEO, Peter Kazacos, will consult to Inabox and becomes a significant shareholder with a 10.6 per cent stake in Inabox.

Inabox will now focus on a smooth integration of the two businesses and identifying cross selling and up selling opportunities.

Inabox reported a net profit of $1.07 million for the 2014 financial year.

Australian listed telecommunications company, Inabox Group Limited (“Inabox” or the “Company”)announced today that it has agreed to acquire the business of leading regional and metropolitan IT and cloud services provider Anittel Group Limited (“Anittel”). read more

The acquisition of Anittel’s business will provide Inabox with a number of important benefits, including:

• Enhanced sales, service and technical capabilities – with over 200 staff and a national footprint the combined group will be able to offer its clients end-to-end IT, cloud and communications solutions in 14 locations across metropolitan and regional Australia.

• New platform - Inabox is acquiring a fully deployed, enterprise grade Cisco Hosted Collaboration Solution (HCS). Anittel has made a multi-million dollar investment building this cloud based communications platform. In FY14 alone, the majority of Anittel’s $4.3m investment in Telecommunications went to support the HCS offering. With over 8,000 endpoints deployed for the Tasmanian Government, the HCS platform is expected to create significant opportunities for further growth of Inabox’s annuity revenue streams.

• Scale and financial strength - the historical (FY14) combined revenues of Inabox and the Anittel businesses was approximately $83m ($46.9m and $36.1m for the Inabox and Anittel businesses respectively). This will provide the combined group with the scale and financial strength to accelerate its growth.

Over the last year, Anittel has restructured its business significantly, reducing costs and refocusing on its core IT services, HCS and cloud businesses. Inabox and Anittel have also identified significant savings in back office and corporate overheads. The majority of these savings will be implemented prior to completion.

Full details of the ASX announcement can be obtained by following the link

Lelde Smits: Inabox has taken its billing system in-house. Why did you decide to move from outsourcing and bring it in internally?

Laura Jacob: Telcoinabox supports and supplies over 200 service providers and one of the offerings that’s included in that is a provisioning and billing system, so that they can bill their own customers. And, as we’ve evolved to accommodate the market demands, we realised that the billing system that we were using wasn’t evolving in the same direction as we were. So we’re committed to giving our service providers, next generation communication products and as much automation as we possibly can.

In order to do that, we have to be able to move quickly and with the same speed that’s characterised us as a business up till this point. And it was just simply becoming too hard and too slow to do it with an outsource billing provider, so we made the decision to bring it in-house.

Lelde Smits: Could you outline the size of the investment in terms of time and resources?

Laura Jacob: Sure, when we decided to embark on this project we allowed a year to make it happen. And the first thing we did was to recruit three developers and we sent those developers to work with that billing company for seven months, so that they could be fully trained in the billing system. And then they came back to Sydney and within three months, we had migrated the billing system in-house, which was fully three months ahead of schedule. So that was a really exciting accomplishment for us.

Lelde Smits: What has been the upside now after a year of billing in-house?

Laura Jacob: That’s easy, freedom and flexibility. So when we’ve wanted to do a product launch before, we would have to gather the requirements and then go speak with the billing company, to determine if this was something they could even do. Then we would have to scope the entire project and then price it, and then we’d have to somehow fit it into their development schedule. And sometimes that could add three to nine months to the product launch, which was really problematic for us. And for our service providers, it made them uncompetitive in the marketplace.

Having the billing functionality in-house means that our teams can work collaboratively, so that we can get these product launches out so much more quickly. And we get exactly what we need, because we’ve been involved in the process from the beginning.

Laura Jacob: They are indeed. Our retail service providers are geographically disparate, so some of them have been impacted by NBN for much longer than others. So they’ve been selling NBN services for over a year. But as NBN footprint grows we’ve had to build a new system, a new integration with a new carrier that’s more robust, that has more coverage and that offers a higher degree of automation than they’ve had up until now.

Laura Jacob: We have such an exciting build happening and bringing the billing system in-house was the first step to that. So it’s actually quite a cool time to be in telecommunications right now with NBN, because it’s really changing the face of what communications are and how those communications are delivered. But, with that brings challenges as to how you manage those products and how you bill those products. And so we’re embarking on a new architecture and something that will allow us to bill those products a lot more naturally. And basically, make it a lot easier for our service providers to sell and bill complex products.

Lelde Smits: Laura Jacob, thank you so much for the update from Inabox Group.